Barclays Remains Underweight on Alon USA Energy (ALJ) After Q2 Miss; Expensive Against Peers
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Price: $13.32 --0%
Rating Summary:
2 Buy, 9 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
2 Buy, 9 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barclays maintains an 'Underweight' on Alon USA Energy (NYSE: ALJ) price target of $10.00.
Barclays analyst said, "From a valuation perspective, we believe that ALJ remains expensive compared to its peers. ALJ currently trades at 3.1x EV/2012 EBITDA, compared to the group average of 2.6x, Valero (NYSE: VLO) at 2.9x and HollyFrontier (NYSE: HFC) at 2.2x and Tesoro (NYSE: TSO) at 1.9x . On the basis of EV/daily barrel of complexity, we estimate ALJ currently trades at $377, or a 37% discount to DLK, 67% discount to HFC, 59% discount to Marathon Petroleum (NYSE: MPC), 17% discount to TSO and a 6% discount to VLO. In comparison, we estimate ALJ will generate 2012 EBITDA of $336 mm, or $379 per barrel of complexity, representing a 54% discount to Delek (NYSE: DK), 67% discount to HFC, 64% discount to MPC, 47% discount to TSO and 20% discount to VLO. We think the valuation gaps are unreasonable since the refineries' value should be a direct function of its cash flow earnings power and the company's relative rate of EV per daily barrel of complexity should closely match their relative cash flow rate."
"We raise our 2011 and 2012 EPS estimates for ALJ to $1.60 and $2.00 from $1.05 and $1.25, respectively."
For more ratings news on Alon USA Energy click here and for the rating history of Alon USA Energy click here.
Shares of Alon USA Energy closed at $9.34 yesterday.
Barclays analyst said, "From a valuation perspective, we believe that ALJ remains expensive compared to its peers. ALJ currently trades at 3.1x EV/2012 EBITDA, compared to the group average of 2.6x, Valero (NYSE: VLO) at 2.9x and HollyFrontier (NYSE: HFC) at 2.2x and Tesoro (NYSE: TSO) at 1.9x . On the basis of EV/daily barrel of complexity, we estimate ALJ currently trades at $377, or a 37% discount to DLK, 67% discount to HFC, 59% discount to Marathon Petroleum (NYSE: MPC), 17% discount to TSO and a 6% discount to VLO. In comparison, we estimate ALJ will generate 2012 EBITDA of $336 mm, or $379 per barrel of complexity, representing a 54% discount to Delek (NYSE: DK), 67% discount to HFC, 64% discount to MPC, 47% discount to TSO and 20% discount to VLO. We think the valuation gaps are unreasonable since the refineries' value should be a direct function of its cash flow earnings power and the company's relative rate of EV per daily barrel of complexity should closely match their relative cash flow rate."
"We raise our 2011 and 2012 EPS estimates for ALJ to $1.60 and $2.00 from $1.05 and $1.25, respectively."
For more ratings news on Alon USA Energy click here and for the rating history of Alon USA Energy click here.
Shares of Alon USA Energy closed at $9.34 yesterday.
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